Prospects for Delek Real Estate bondholders, who will probably lose at least 50% of their investment, look gloomy compared with those of other creditors. Take, for instance, the banks.

Institutionals loaned NIS 2.2 billion of the public's hard-earned savings to Yitzhak Tshuva's floundering company, without demanding security or interest rates that would reflect the outrageous risk involved. Meanwhile, the banks carefully fortified themselves, receiving the security necessary to limit their exposure.

Over the past two years, Delek Real Estate has been paying back loan payments late and has violated financial covenants, but it nonetheless repaid NIS 1.4 billion to the banks. Its current bank debt is about NIS 600 million.

This includes NIS 240 million to Bank Leumi, secured by the Hof Carmel project in Haifa. That development is valued at NIS 285 million in the company's books. Delek Real Estate also owes NIS 110 million to Israel Discount Bank and NIS 90 million to Bank Hapoalim. Both loans are secured by stock in DGRE, a Delek Real Estate subsidiary, as collateral for their loans.

The NIS 90 million Delek Real Estate owes to Mizrahi-Tefahot Bank is backed by the company's 50% stake in Capital Impact, which finances income-generating properties in Europe. Another NIS 60 million is owed to Mercantile Discount Bank, backed by the company's shares in a Fattal Hotels fund that invests in European hotels.

Debts of NIS 200 million to Delek Group and NIS 60 million to Phoenix Holdings, another group company, are secured by shares of Delek Real Estate's fully-owned subsidiary Elad Israel Residence.

Bondholders, though, appear to have felt that Tshuva himself was the best security for their investment and therefore haven't convened too many meetings or made a fuss over Delek Real Estate's woeful situation. In the last two years the company has repaid NIS 300 million of principal on its bonds.

The banks, despite getting most of their money back, weren't left completely unscathed.

At the end of 2005, six months after Delek Real Estate went public, Bank Hapoalim bought 11% of the company for NIS 270 million. The deal reflected a company valuation of NIS 2.17 billion before the money for Delek Real Estate. The company is now worth a mere NIS 80 million, and over the years Hapoalim has written off the entire investment.